Wise Startup Blog

Well, it appears we, Grooveshark, have had quite a day of coverage today.

Duncan Rileys of TechCrunch did a short write-up of our announcement to up compensation from $.10 to $.25.

This is in addition to our announcement of a promotion we are doing tomorrow where we are paying $.70 of the price of every song bringing the price down to $.29 for all songs on our site from 12am-12pm on Friday, Oct 12.

Well, what does this whole recompensation thing mean?

What is recompensation?

Grooveshark has recently made the announcement that we are now giving our users $.25 per song sold, as opposed to the previous $.10 — now what does that mean?

Here is how the recompensation model works:

User A uploads his content into Grooveshark

User B buys a $.99 track from User A

Grooveshark pays User A $.25

The remaining $.75 is used to pay any licensing costs

We believe so strongly in our system, that we have given away all of our profits to our users in the form of this $.25 credit.

These credits can be used to purchase more music, and in the future merchandise, tickets, etc.

Also of note, our advisor/mentor/local VC Dan Rua has also given us a great write-up on his blog as well, check it out for a good read !